DAY TRADING IN CYPRUS

Written by Andy George


DAY TRADING IN CYPRUS By: Andy George     Inrepparttar time it takes to readrepparttar 112412 first paragraph of this article, a number of investors across Cyprus will have hit a button on their computer keyboard and bought a batch of shares using an online dealing service.  Byrepparttar 112413 time you have read it torepparttar 112414 end, those same investors may have had another peak atrepparttar 112415 share price and decided to sellrepparttar 112416 shares – either at a profit or sometimes at a loss.   Is this easy money for little work? Sometimes this may be true but not always.  Is thisrepparttar 112417 way Cypriot investors must invest? Personally I believe this is not a way that investors should invest.  However what is certain is that new technology has helped to forge a new type of private investor (or speculator):repparttar 112418 day trader.   Unlike traditional investors,repparttar 112419 day traders have no interest inrepparttar 112420 future earnings ofrepparttar 112421 company whose shares they are buying.  They could not care less about fundamental analysis or even whatrepparttar 112422 company does.  Hence one can say thatrepparttar 112423 terms: Earnings per share, Price Earnings Ratio, Dividend Yield or Cash Flow would not be in their dictionaries. MOMENTUM: However day traders chase fast and easy profits by buying and selling shares several times per day – their decisions are driven purely by momentum.  This means they are more interested inrepparttar 112424 arts of technical analysis, volume of transaction, volatility of stocks and bid-depth analysis. They aim to buy shares whose prices are rising and sell oncerepparttar 112425 momentum slows.  The typical day trader will switch out of shares in a matter of minutes.  Oftenrepparttar 112426 price rises are tiny but day traders can make profits because commissions are low (thoughrepparttar 112427 0.6% sales levy does not help) and because they buy and sell over and over again.   There’s no question of holding stocks overnight – portfolios are emptied ready for whenrepparttar 112428 market opensrepparttar 112429 next day.  The Internet has made all this possible.    Whatever one may say about them, day traders are a vital part of any Stock Exchange. Their constant wheeling and dealing creates liquidity in stocks something that is necessary in any Stock Exchange. ONLINE TRADING HAS TAKEN OFF IN THE USA: On other international stock exchanges, day trading by private investors existed inrepparttar 112430 pre-internet era of telephone-based dealing on a much smaller scale.  However inrepparttar 112431 late 1990s withrepparttar 112432 arrival of online-based dealing that coincided with a bull market,repparttar 112433 number of day traders soared especially inrepparttar 112434 US.  In Cyprus online trading started in 2000 (afterrepparttar 112435 spectacular rises of 1999) with a number of online brokers offering such services.  Hence private investors sitting at their personal computers (PCs) can manage their own portfolios minute by minute.   Oftenrepparttar 112436 day trader spends hours at a time monitoring share prices and they tend to rely heavily on information passed on by other traders via chat rooms.  In Cyprus there are a handful of chat rooms.  Even a number of brokerage firms have set up their own chat rooms.      Though inrepparttar 112437 US online trading has taken off,repparttar 112438 same is not true of Europe (especiallyrepparttar 112439 UK).  In Cyprus most ofrepparttar 112440 day traders are related to stockbroker firms though there is a small number of private investors who act as day traders. ONLINE TRADING IS NOT POPULAR IN CYPRUS: In my opinion there are a number of reasons why day trading hasn’t taken off amongst private investors in Cyprus.   The first concerns it’s timing.  Online trading has come at a time whenrepparttar 112441 Cyprus Stock Exchange (CSE) has been in a severe bear market.  As a result investor confidence is at a low point and this in itself would not encourage investors to become day traders.

Defining a long-term investment in the stock market.

Written by Charles M. O'Melia


You have permission to this article either electronically or in print as long asrepparttar author bylines are included, with a live link, andrepparttar 112411 article is not changed in any way (typos, excluded). Please provide a courtesy e-mail to charles@thestockopolyplan.com telling whererepparttar 112412 article was published.

Defining a long-term investment inrepparttar 112413 stock market.

For some “long term” would mean holding a stock position overrepparttar 112414 weekend. For others, it may mean holding a security for at least 1 year forrepparttar 112415 purpose of declaring a long-term capital gain, thus saving on taxes.

The rigid definition of a long-term investment inrepparttar 112416 stock market would be holding a security for a minimum of 5 years, to as long as 30 years.

I’m going to tell you my definition of a long-term investment in a security by telling you a story. A true story!

My Mother worked as a teller in a small bank in Dover, New Jersey. The name ofrepparttar 112417 bank was called The Dover Community Bank. While working atrepparttar 112418 bank (she eventually became a branch manager) she enrolled inrepparttar 112419 bank’s dividend reinvestment plan, making purchases ofrepparttar 112420 stock through pay-roll deductions from her paycheck. She continued purchasingrepparttar 112421 stock throughrepparttar 112422 years, havingrepparttar 112423 dividends from her shares inrepparttar 112424 bank reinvested into more shares every quarter. Byrepparttar 112425 time she leftrepparttar 112426 bank (inrepparttar 112427 early seventies) she had accumulated around 300 shares of The Dover Community Bank.

My Father, when he retired, hadrepparttar 112428 dividends from those shares sent home – to help ends meet. When my Dad passed away at age 80, my brother and I inherited over 7,600 shares of The Bank of New York, all originating from those 300 shares of what was once called The Dover Community Bank.

So, through this individual experience I have adopted my own opinion of what is called a long-term investment in a security. It is simply this – securities should be purchased withrepparttar 112429 intent of providing dividend income to help ends meet during retirement, withrepparttar 112430 understanding that no one can successfully retire without financial freedom. So every investment now in a security would be purchased withrepparttar 112431 intent of holding that security (and adding to it duringrepparttar 112432 years) untilrepparttar 112433 dividend income from that security is ample enough to easerepparttar 112434 loss of income from retiring from my job. Now, I not only provide for myself during my retirement years, but will leave this earthly realm knowing that I will also be able to relieve some financial burdens for those I’ve left behind.

With this definite, concrete purpose for investing in mind, a definite, concrete plan would need to be created (and can be found in my book The Stockopoly Plan) to achieve this long-term investment goal. My Mother invested in only one stock and got lucky – a considered plan would diversify.

So if I am going to hold a security position forever, what criteria should I be looking for in that security? Certainly dividend income – that’s a given! And since I never intend to sellrepparttar 112435 security, capital gains may not even be an issue (more on this later).

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